With high land costs driving affordability concerns, particularly among low- and moderate-income households, manufactured housing presents a potential solution, according to research from Chadwick Reed, Chris Herbert, and James Shen of the Harvard Joint Center for Housing Studies. The paper, “Comparison of Costs of Manufactured and Site-Built Housing,” finds that manufactured housing offers a significant cost advantage over site-built homes across three product types: single-section, double-section, and CrossMod variant homes.
Historically, single- and double-section homes have constituted the vast majority of manufactured housing in the United States. CrossMod was recently introduced as a manufactured housing option that emulates the appearance of site-built homes. According to the researchers at the JCHS, CrossMod homes offer the potential to expand consumer interest in manufactured housing and overcome community opposition to the housing type rooted in negative perceptions of manufactured housing’s aesthetics.
For the paper, the JCHS analyzed data from the second quarter of 2020 on manufactured housing and site-built housing costs. The estimates on cost come before the onset of inflation that followed the COVID-19 pandemic.
According to the report, single-section, double-section, and CrossMod manufactured homes were found to deliver between 35% and 73% cost savings compared with site-built counterparts. When factoring in the median value of a finished lot, the cost of manufactured housing relative to site-built is 54% of a site-built alternative for single-section homes, 70% for double-section homes, and 80% for CrossMod homes. As a result, the authors conclude that while manufactured housing offers savings regardless of land cost, the housing type is a more attractive alternative in markets with lower land costs.
In addition to cost comparisons, the paper highlights the barriers—from policymakers, housing organizations, and industry stakeholders—that need to be overcome for manufactured housing to be adopted on a more widespread basis and lower the barrier to homeownership.
